Picture: REUTERS: SIPHIWE SIBEKO
Picture: REUTERS: SIPHIWE SIBEKO

The rand was stronger on Wednesday morning, leading its emerging-market peers in gains. The SA Chamber of Commerce and Industry (Sacci) is set to publish its business confidence figure for September.

Market sentiment, which has been affected by continuing uncertainty in the US-China trade war, slightly improved on Wednesday after US Federal Reserve chair Jerome Powell hinted  at the possibility of another interest rate cut, on Tuesday, amid fears of an economic slowdown.

“The Fed might well be our saving grace. An address by Powell at the National Association for Business Economics last night cut through the Trump impeachment noise to provide a smidgen of stability to unsettled markets,” RMB analyst Nema Ramkhelawan-Bhana said.

Lower interest rates in the US may stoke inflation in the world's largest economy, putting a little more pressure on the dollar, as higher inflation will reduce the purchasing power of the currency over time. That would be likely to aid the rand and other emerging-market currencies.

The median forecast among economists polled by Bloomberg is for business confidence to have fallen to 89 index points, from a 34-year low of 89.1 points in August.

“Sacci’s read of September’s business confidence will serve only to reinforce the downbeat sentiment on SA’s prospects, providing little assistance,” Ramkhelawan-Bhana said.

At 9.35am, the rand had firmed 0.41% to R15.2177/$, after closing at R15.27/$ on Tuesday. It had strengthened 0.22% to R16.7051/€ and 0.32% to R18.6149/£. 

Gold added 0.18% to $1,508.96/oz and platinum 0.27% to $893.20. Brent crude was flat at $58.1 a barrel.

mjoo@businesslive.co.za